CFA Level I · CFA Level I Exam · Analyzing Statements of Cash Flows I
Under IFRS, which of the following cash flows would most likely be reported as an investing activity by a non-financial company?
Cash paid to acquire shares of another company as a long-term holding is an investing outflow. Dividends paid and proceeds from issuing bonds are financing flows because they involve transactions with owners and creditors rather than acquiring or disposing of long-term assets.
- ADividends paid to shareholders
- BCash received from issuing bonds
- CCash paid to acquire shares in another company as a long-term holdingCorrect
Explanation
Purchases of long-term investments in other entities' equity are investing outflows. Dividends paid and bond proceeds are financing activities because they relate to capital providers.
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